IN FOCUS: AN OVERVIEW OF LICELLA HOLDINGS LTD, ITS CORPORATE STRUCTURE AND MARKET STRATEGY.

The alphaDIRECT Insight

Licella is a global leader in hydrothermal upgrading with its trademarked Catalytic Hydrothermal Reactor (Cat-HTR) platform. Through its unique partnership strategy, Licella is focusing on helping its partners fully leverage all aspects of their business by utilizing its proprietary Cat-HTR technology to convert low value products and waste streams into high value products, such as stable, non-acidic biocrude that is equivalent to conventional oil. We believe that Licella is a commercial pioneer in this technology and once the company’s first commercial project goes into production during 2019, the platform can be used to convert a variety of different feedstocks into high value products. With a capital light licensing and royalty model, Licella will be able to offer their technology solution to other partners and pathway to broader commercial adoption by a variety of industries.

Shawn Severson:First, I’d like to thank you, Len, for taking the time to speak with us today. Today we’d like to cover an overview of Licella and a review of the corporate structure and market strategy. However, before we dig into the business, could you start by giving us a brief introduction of yourself?

Len Humphreys: Sure, Shawn, I’m delighted to. My name is Len Humphreys. I am originally from the U.K but I’ve been in Australia for about 22 years now and my background is as a Chartered Chemist. I have a PhD in Organic Chemistry from the UK and I’ve always been involved in high tech at very large corporates as well as a leader of technology development and globalizing technology and also applying technology in a lot of inventive ways. So, I guess I followed my dream and here I am with Licella today.

Shawn Severson: Thank you very much, Len. Can you provide us with a general overview of Licella – who you are, what you do, etc.?

Len Humphreys: Yes, of course. Licella is a global leader in a particular type of technology which we like to call platform technology and it’s been the field of hydrothermal upgrading and we call our platform Catalytic Hydrothermal Reactor (Cat-HTR), which is our trademark that we use.So, what does that mean and how does it compare and contrast to other approaches? Before we go there, let’s look at what our rational is and what we are trying to do in our business model. We are working with our partners globally and with an array of different feedstocks. The commonality in those feedstocks is that the business model of our partners is generally in distress or it’s reaching its old age and needs some revitalization.

Licella tries first of all to complement our partners by taking certain product streams that they produce in their normal processes that are low valued or may have actually become waste. We then apply our technology, which we’ll come back to in a minute, to convert the streams into high value products that our partners can then sell. So, let’s go back to the technology.

Our focus is Hydro-thermal upgrading. You might wonder how that compares and contrasts to either methodologies of converting biomass waste, low-grade coal , ‘end of life’ plastics, or ‘end of life’ tires to use as raw material for high grade chemicals. Some may have heard of some of the older techniques like gasification and pyrolysis.

Both of those techniques are dependent upon just using a hammer, like heat, and in the case of gasification, converting the molecule back to gas and gluing the molecules back together from the gas to create something liquid that be used as a pure organic chemical. The case of pyrolysis is simpler – they try and crack the bigger molecules of these residue materials to create an oil. The problem with pyrolysis is that it’s a reaction that can get out of control – you’ve created a lot of ash and charcoal and ultimately convert biomass by pyrolysis, it’s high in oxygen and unstable to ship.

So, our approach is hydro-thermal which is a much milder approach of taking these residue molecules, ‘end of life’ tires, ‘end of life’ plastics or biomass and mildly unpolarizing and unzipping them in the presence of near supercritical water. This is very mild compared to pyrolysis and gasification and hence you don’t get the runaway reactions. In simple terms, this means that you get a much higher conversion rate from the feedstock to the oil and compared to pyrolysis, the products we make are stable. We get a stable bio-crude with a lower oxygen at a higher yield compared to retaining the carbon. In summary, it’s all about retaining the carbon in a feedstock and making sure that that carbon represents itself in the final product.

That’s a brief overview of what we do, how we compare the gasification and pyrolysis and what the technology does.